Sterling has picked itself up from multi-year lows against the kiwi, buoyed by improving economic sentiment

The pound was able to reverse a four day slide against the kiwi yesterday, following positive data in the UK labour market.

• Figures showed that fewer than expected Britons claimed for unemployment benefit month-on-month in September, and the overall unemployment rate held steady at 7.9%, beating market expectations of a rise to 8.0%.
  
• The kiwi also suffered after some investors turned bearish following weak US retail sales, which fell in September by the largest amount in 2009, driven by a fall in car sales at the end of the country's scrappage scheme.
  
• The pound was able to reach up over 2.17, but in a market that remains broadly bearish towards the pound, the kiwi trimmed its losses, with the price closing at 2.1600.
  
• The New Zealand dollar has climbed again this morning, supported as stronger-than-forecast inflation data raised the prospect of an interest rate rise sooner than expected.

Aussie edged higher vs the pound again yesterday, but sterling has rebounded following upbeat comments from a BoE policymaker

The aussie edged higher yesterday as continued strong demand for the high-yielding currency offset positive employment data in the UK.

• The UK currency found early support following better-than-expected employment data that revealed the rate of people claiming benefit allowance was declining.
  
• However, the news was unable to buoy a broadly weaker pound, with investors continuing to be attracted by the recent rate rise and general positive sentiment surrounding the Australian economy.
  
• The aussie also took advantage of rallying equity markets, which took their lead from better-than-expected quarterly earnings at JP Morgan reinforcing the notion that economic conditions are improving.
  
• In the early hours of this morning, the Reserve Bank of Australia chief made a hawkish speech that has provided a boost to high-yielding currencies. The broad dollar sell off that has ensued has prevented the pound from sliding further against the aussie, with the price currently hovering below 1.75.
  
• Sterling has also received a boost this morning in the wake of positive words from BoE policymaker Paul Fisher who said that he felt confident that QE was working

The single currency continues to strengthen against the dollar, posting a fresh 14-month high

The dollar slid further against the euro yesterday as solid results from JP Morgan Chase and rising equities stoked optimism about an improving global economy.

• The euro extended its rally, hitting a fourteen-month high of 1.4943 against the greenback, boosted after data showed an acceleration in eurozone industrial output.
  
• Industrial production in eurozone rose for the fourth straight month in August, providing further evidence that the area's economy is on track to post its first rise in gross domestic product in the third quarter since the first quarter of 2008.
  
• Pressure on the dollar was also added as every major stock market in Europe rose after New York-based bank JP Morgan Chase announced strong third-quarter earnings, adding to risk appetite.
  
• The dollar found little support against a broadly stronger single currency after data revealed that US retail sales fell by 1.5% in September, although they did top estimates of a drop of 2.0%.
  
• The euro has continued to push higher this morning after the FOMC minutes confirmed that interest rates in the US would remain at record lows for some time.

Sterling is making strong headway against a weakened dollar, advancing towards 1.62

Sterling made strong gains in early trading yesterday following better-than-expected employment data, but the price pulled back to close up 0.4% at $1.5980.

• The number of UK jobless claiming unemployment benefit rose by 20.8K in September, less than the forecast figure of 25.1K, and the smallest rise since May 2008, enabling the pound to post an intra-week high of $1.6022.
  
• The greenback also suffered from comments made on Tuesday evening from Fed Vice Chairman Donald Kohn, which supported speculation that the dollar downtrend will be broad and continuous for some time to come.
  
• However, the dollar trimmed its losses in the afternoon following a drop in sales figures. Due largely to the end of the cash-for-clunkers programme, retail figures in the US fell by 1.5% in August, having risen by a revised 2.2% in August.
  
• The dollar has come under heavy pressure in trading this morning after the Federal Open Market Committee minutes, released late last night, confirmed speculation that US interest rates would be kept at near zero for an extended period.
  
• Sterling has gained over a cent, or 0.8%, so far today, with the price currently hovering just above 1.61.

Bearish sentiment towards the pound prevailed yesterday, but the sterling is rallying strongly against the euro today

The pound relinquished early gains against the single currency, closing marginally down at 1.0704 as rising risk appetite benefited the euro.

• Sterling initially rose against the single currency yesterday after data showed a smaller than expected rise in the number of UK jobless claiming benefits, and the overall unemployment rate unexpectedly held at 7.9%.
  
• This data prompted investors to further pare back some of the heavy bets built up against sterling in recent weeks, which have pushed the price to multi-month lows.
  
• In addition, some analysts have said that speculation over an extension of quantitative easing could be overdone, and that the pound / euro price could have correction potential.
  
• However, the market remained broadly bearish on sterling because of Britain’s deteriorating fiscal position and the likelihood that rates will remain at 0.5% for a long period.
  
• In afternoon trading, the euro clawed back its losses, supported by a significant rise in global equities, which buoyed demand for the broadly stronger single currency.
  
• The pound has reversed its down trend this morning, benefiting from the word so of a BoE policymaker who said that quantitative easing was now working.